By Staff writer
Hotel operator announces plan to convert office building into hotel with completion slated for Q2 2016
Kuwait-based Action Hotels has announced plans for of a three-star hotel in Saudi Arabia's capital city, Riyadh.
The 130-bedroom property in the Olaya district will be developed through the conversion of an existing office building in just over 12 months.
According to Alain Debare, CEO, Action Hotels, there is a limited supply of quality, internationally-branded economy and midscale hotels in Saudi Arabia.
"There is great potential for Action Hotels in the Kingdom, and in Riyadh in particular. Although the Riyadh hotel market is a mature market, there is considerable demand for mid-economy branded hotels from the corporate segment, yet this segment is currently under supplied," he said.
Recent reports suggest that Riyadh has seen a sharp rise in RevPAR since 2008, achieving one of the highest average daily rates in the region during 2014, according to STR Global.
The conversion project is scheduled to open in the second quarter of 2016, at an expected project cost of approximately $8 million. Debare said that this will be funded by existing cash and debt facilities available to Action Hotels.
He added that Action Hotels, which operates the Ibis and Holiday Inn brands in the region, has signed a 20-year operating lease agreement, and is finalising the terms of a long-term management agreement with a leading hotel brand, with an announcement expected shortly.
The addition of the Riyadh hotel brings the committed development pipeline from Action Hotels to a total of nine hotels with 1,514 rooms and a combined operating hotels and committed pipeline of 3,002 rooms.
Sheikh Mubarak AM Al Sabah, founder and chairman of Action Hotels said: “Saudi Arabia is an attractive market for us, being the largest country in the region and having recently undertaken a widespread, long-term strategy for non-oil economic diversification driving business travel.”For all the latest travel news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.